Money 101-Budgeting Basics for Students

September 12, 2016

By Lesley Ridge, Campus Branch Manager – University of Southern Maine, Gorham Brooks Student Center

Another school year is upon us and one of the most popular questions asked of me from students at USM is “How do I manage money when I feel like I have very little to none to manage?” I chuckle to myself, as I have been in their shoes before as a college student thinking –how am I going to make it to Spring Semester, live on Ramen Noodles? Managing money, even if a small amount, is a constant challenge. The biggest thing to remember is making sure you do not run out of money before the semester ends. We all try to avoid it, but it all begins with a budget. You guessed it! The next most popular common question from students- “What is a budget?” Developing a steady personal budget is one of the most important steps towards being in control of your finances. A simple look at your income and expenses will determine if you are living within your means. Once you have a personal budget, you will be able to spend your money more wisely and use it towards your financial goals.

Three important pieces to know for your personal budgeting plan are: cash flow, tracking spending, and knowing your needs & wants of life as a college student. It seems easier to understand when you break it down, which I have done many times with students that stop by the campus branch. First, tally up all the money you expect to have for the semester (regular income from job/parents, money left over from all your sources after paying your semester bill, etc. Next, look at the past couple months and see where you spend your money. This is an eye opener for many students and is a Wow! factor. I have had some students gasp when they look at their spending and see that they have spent more than $40 in a week at their local coffee spot! Finally, make a needs and wants bucket list. Things like food, clothing, transportation, and school stuff can go in the Needs Bucket. Things like concert tickets, extra pizza deliveries, or the fourth cup of your favorite latte would fall into the Wants Bucket.

Budgeting isn’t about not spending $, it is about making sure the things you need to be a successful college student are taking care of first and then you can move on to the fun stuff that you want to do! Once you have a plan in place and stick to it you will become a better money manager and be able to afford some fun things along the way!